SEC. GATES: I have a brief statement and -- oh, I should say good afternoon.
The last time I did one of these and didn't even say good afternoon, several of you commented on it. So good afternoon.
SEC. GATES: I have a brief statement and then Chairman Mullen and I'll be happy to take your questions.
As you know, I have challenged this department to become more efficient in the way it is organized, staffed and operated and, in so doing, find the savings necessary to sustain essential military force structure and capabilities. Earlier this week I met with the department's senior leadership to establish a plan and process for accomplishing this goal. Getting this done will require the priority attention of our entire leadership team and include all services, commands, components and elements of America's defense establishment.
At the same time, we'll be reaching out to the Congress, academia, think tanks and elsewhere for specific and workable proposals on how to change the way this department does business.
It is also important to note that contrary to some of the commentary, this initiative is not about cutting the overall Defense budget. It remains my firm belief that during an era of continued conflict, the United States requires a Defense budget that grows modestly but steadily in real terms for the long haul.
The president's budget proposal, presently under consideration by the Congress, proposes such a real growth path. However, the department will face very difficult choices with regard to sustaining needed military capabilities in the years ahead unless it is able to shift resources away from excess management structure or lower- priority areas and towards current and future combat capabilities.
So this is about belt tightening, making tough choices and essentially refocusing available resources, not about cutting the overall Defense top line, now or in the future.
Similarly, while we will continue to take a hard look at all aspects of the department's budget, the focus of this effort is on overhead costs and business operations, not core military functions such as force structure, uniformed personnel or future combat capabilities.
My intent with these internal shifts is to protect required budget growth for those elements of the department most central to doing our core military mission. In so doing, I also hope to begin to change the cultural mindset of this department so that civilian and military employees carry out their jobs with an increased sense of care and urgency when it comes to how they spend the vast amount of tax dollars entrusted to us by the American people.
Finally, I should note that the Congress has begun the process of acting upon our FY '11 budget request, with the House Armed Services Committee passing its proposed defense authorization bill yesterday. While I do not have all of the details, I am very concerned about the initial reports. In particular, it appears that the committee continues to insist that the department add an extra engine to the Joint Strike Fighter, or JSF, program. In addition, the detailed conditions they have imposed on the overall JSF program would make it essentially un-executable and impose unacceptable schedule and budget costs.
The JSF is one of the department's most important, largest and costliest acquisition programs. Our team has taken aggressive steps to restructure and manage it through this critical phase in development. I am therefore determined to ensure that it remains on track. Accordingly, as I have stated repeatedly, should the Congress insist on adding funding for a costly and unnecessary JSF extra engine or direct changes that seriously disrupt the JSF program, or impose additional C-17 aircraft, I will strongly recommend that the president veto such legislation.
Let me be clear. I believe the defense budget process should no longer be characterized by business as usual within this building or outside of it. When -- we in DOD must make tough choices and decisions to ensure that current and future military combat capabilities can be sustained in a time of budget stringency.
Further, we will strongly resist efforts to impose programs and changes on the department that the military does not want, cannot afford, and that takes dollars from programs and endeavors the military services do need.
I spent my first two years on this -- in this job principally focused on the wars in Iraq and Afghanistan. I did not expect to have more time to also focus on reforming how the department does business.
President Obama has given me that time and that opportunity. I intend to spend every day, for as long as I remain secretary of Defense, doing all I can to implement these reforms that are so critical to sustaining our military in the years ahead.
ADM. MULLEN: Thank you, sir.
The only thing I would add is, the uniformed military is fully in support of where Secretary Gates is headed with respect to this. When I was a chief of service, head of the Navy a few years ago, we put a great deal of effort into this same kind of approach.
And the proper stewardship of the taxpayers' dollars is high on absolutely everybody's list. I don't underestimate the challenge that is here. But I think being able to get at overhead and shift it to the tooth, to -- and do so inside the force structure that we have right now is absolutely critical.
I also just wouldn't underestimate his ability to do this. Having grown up in the budget world, having watched him oversee and execute the many programs that are now no longer with us, many people said that that was not possible.
It is possible and quite frankly it's needed, if we're going to have the resources that we need and apply them where we need them. So I look forward to continuing to support that effort, along the lines of the outcomes that the secretary has described.
SEC. GATES: Anne.
Q Does the United States consider the sinking of the South Korean warship an act of war? And seeing as the United States has vowed to defend South Korea, what do you plan to do about it? What are your options?
SEC. GATES: Well, first of all, we certainly support the findings of the Korean -- the South Korean investigation. We obviously are in close consultation with the Koreans. The attack was against one of their ships. And we will -- naturally they would have the lead in determining the path forward. They've laid out some paths forward, and we will be consulting very closely with them as we move ahead.
ADM. MULLEN: I spoke to my counterpart yesterday. And we've been engaged with them since the incident, not just from here, but also Admiral Willard in PACOM, as well as, obviously, General Sharp. And we are all focused on that region, the stability in that region -- that needs to be sustained -- and at the same time very focused on supporting our strong ally in the Republic of Korea.
Q But could you say whether or not you agree that -- with the South Koreans that it is in fact an act of war? And can you go over some of the options that you have to respond?
SEC. GATES: I think that -- I think basically what we've said is about all there is for us to say. We accept the findings and support the findings of the investigation. The Republic of Korea has outlined several paths forward, and we will be consulting very closely with them going forward.
Q Admiral, could you address that too, please? It's clearly an act of war, isn't it?
ADM. MULLEN: Again, I think the secretary -- we've said all we want to say on this right now. Certainly we're concerned about it. We've supported them. We've helped them in the investigation and we agree with the conclusion. They're a great friend and great ally, and we'll continue to do that.
Q If I could back to the alternate F-35 engine, billions have already been spent on developing the engine, and $3 billion more, I believe, are what we needed to actually get it ramped up. What exactly are your oppositions to the program, as proponents say that the engine is actually over time going to save money for the program and will actually probably increase safety?
SEC. GATES: The Bush administration opposed this engine. The Obama administration opposes it. We have recommended for several years now against funding this engine, considering it a waste of money. And to argue that we should add another $3 billion in what we regard as waste to protect the billion and a half (dollars) that we believe already has been wasted, frankly, I don't track the logic.
Let me just say we think -- with respect to the -- to the proposal for the alternate engine, we think the proposal is based on unrealistic cost estimates. We do believe that the full-up costs for us are about $2.9 billion. This department has a long and unhappy experience with overly optimistic contractor estimates.
The proposal does provide a fixed price, but not for the engine we need. The proposed engine is based on the design they currently have on the test stand, which we are deeply concerned may not meet the performance needs of the Joint Strike Fighter. Any cost to take the design to required JSF performance levels would presumably be paid by taxpayers.
The current engine -- their current engine, the alternate engine proposal, the engine is far less mature than the JSF engine. The proposed engine is still in development, has about 200 hours of testing compared to 13,000 for the F-135. Even the immature engines in the proposal would be more expensive than the JSF engine during the critical period of the program. And finally, the GE proposal assumes receiving a guaranteed buy of over half the JSF engines for three years in order to allow them to catch up.
As I've said before, only in Washington does a proposal where everybody wins get considered a competition, where everybody is guaranteed a piece of the action at the end. Yeah, we're in favor of competition. But my idea of competition is winner takes all, and we don't have that kind of a situation here.
Q Is there a safety readiness and operational readiness concern that the alternate engine may actually boost operational readiness?
SEC. GATES: I don't think that anybody -- I haven't heard that argument by anybody.
ADM. MULLEN: I mean, I have no concern. The services have not expressed that concern. We've flown with single engines historically and done so very well.
Q Your opening statement -- I want you to be clear for the world who's following weapons issues and all that. You're ruling out major cuts in the '012 budget comparable to your April '(0)9 cuts -- your April '09 cuts.
SEC. GATES: No, I'm talking about ruling out a cut to the top line.
Q But you're not ruling out potential more weapons program cuts?
SEC. GATES: No. I think we've -- I think that, you know, there are some that are still being looked at, both by the department and by the services. But the principal areas that we're looking at are business operations and overhead.
Q Will you stay here through next year to see that '012 budget through? Because what you're proposing can be rope-a-doped if there's a perception you're leaving at the end of the year. Rope-a- dope means they could, you know, resist --
SEC. GATES: I know what rope-a-dope means. (Laughter, laughs.) I've been in -- I started in the government 44 years ago. I know exactly what that means. (Laughter.)
ADM. MULLEN: (Laughs.)
Q A serious question, though.
Do you now anticipate staying here through the end of '011 to see the '012 budget through?
SEC. GATES: We'll see.
Q Can you tell us when you first expect concrete results of some kind in Kandahar over the next -- later this year? And are you having to reassess the timeline and the strategy, even, in Kandahar, given the recent violence there and given the political difficulties you face?
ADM. MULLEN: The Kandahar -- all the efforts with respect to Kandahar -- and in some ways, they are already under way. General McChrystal was here last week, and certainly indicated no indications to change his execution plan.
The recent violence level which has spiked is, quite frankly, not unexpected. General McChrystal has said, General Petraeus has said, I have said we expect this to be a tough year. And in fact, the insurgents -- you know, the poppy season is over. They've gone back to get their weapons. It's that time of year. So that the violence level would rise doesn't -- doesn't surprise me at all.
We've got the right strategy, the right leadership. The issues in Kandahar are really focused on this, General McChrystal has said -- this rising tide of security. This isn't going to be a D-Day, cross- the-line kind of operation and with a very heavy focus on the governance piece there, as well.
And I think that's actually the biggest challenge that we have. And governance now versus governance as we -- as -- as the Kandahar situation changes over time will be a primary area of focus.
Q Mr. Secretary --
Q Do you have anything to add to that?
Q -- are you still confident that General Odierno is going to be able to meet his withdrawal deadline?
SEC. GATES: Yes. I mean, we clearly are paying close attention to political developments.
I think that the completion of the recount in Baghdad has -- is clearly a positive development, particularly insofar as it reaffirmed the original count from the legitimacy of the election.
So we obviously do -- you all know this department as well as anybody. We plan for everything. But right now, every expectation is that we will meet the 50,000 as of the 1st of September.
Q How much more can he push back on the withdrawals? I mean, May was supposed to be a big month for withdrawals, and he's still slow-rolling it.
SEC. GATES: Well --
Q At what point can you no longer get there from here?
SEC. GATES: I think that he has delayed some withdrawals a little bit, in part because of the postponement of the election from January to March. But he has -- sort of between now and the 31st of August, as far as I'm concerned, General Odierno has total flexibility in terms of how he manages the drawdowns. And if he wants to back-end load it, then we can -- then TRANSCOM can make it work; then I have no problem with that at all.
ADM. MULLEN: And we've -- we've looked at the executability of it. And it is -- and, in fact, he has -- and I take issue with the slow-roll piece, because he has actually brought out a significant number of people and equipment. And he continues to focus on that. So like the secretary said, we're very comfortable we can meet that deadline.
Q Secretary, back to Korea, are you concerned that the takeaway for both North Korea and maybe beyond, Iran, is that the U.S. is stretched so thin that it's impotent to respond in a meaningful way?
SEC. GATES: Absolutely not. You know, the truth of the matter is we've said for a long time that, if there were a problem in Korea, our main arms would be the Navy and the Air Force.
And so we -- those are not stretched in the same way that the -- that the ground forces are. But again, the key to remember -- the key thing to remember here is that this was an attack on a South Korean ship, and the South Koreans need to be in the lead in terms of proposing ways forward.
Q Yes, sir. If we could get back to your opening statement on overhead, at your speech -- during your speech at the Eisenhower Library, you referred to perhaps the Pentagon being too top heavy on generals and admirals. Can you talk a little bit more about that? What options do you have or what are you considering to maybe winnow down the number of senior-level officers, which has grown, as you pointed out, while the overall force has shrunk in recent decades?
And then maybe you, sir, can comment on what the uniformed services are likely to think about that.
SEC. GATES: First of all, I was very clear at the Eisenhower Library speech that I was talking about not just generals and admirals, but also senior civilians. And I used specific examples of downgrading senior civilian positions, as well, to lower levels. So this is -- this is not a problem that is confined by any means to the -- to the uniformed services.
And you know, some of our combatant commanders are already looking at whether they can make some reductions in that area. We will proceed with care on this, but I think we have to -- we have to figure out a way to try and -- I realize this may be a contradiction in terms -- but to try and make this department more agile. And where, as I said at the -- in that speech, where my approval of a guy and a dog going to Afghanistan doesn't have to go through five four- star headquarters.
ADM. MULLEN: And my -- the way I certainly look at that, Brian, is that there are no boundaries on where to look; that every aspect of what we do needs to be examined to ensure we don't have overhead we can't afford, that we don't have -- or overhead which is -- which we're expending a great deal of resources on at the expense of our people, our force structure and our systems, and that we really have to focus it in that regard.
And I, for one, believe the target numbers that the secretary's laid out are not that tough to get to, quite frankly. It's going to take a considerable amount of effort to do it, but I think, doing it well, that it can be achieved. And we don't achieve it, quite frankly, at our own peril, in terms of sustaining what we need to fight the two wars we're in and to meet the security challenges that we have around the globe.
Q Can I ask, while you're examining the different paths that you suggested that the South Korean government was -- had presented to you, are any of the American forces in South Korea on a higher state of alert?
ADM. MULLEN: They're on their normal state of readiness. We're engaged very routinely out there. We have a considerable number of forces that are stationed both, obviously, on the land and in the air and sea. And the forces are clearly aware of what's gone on. But we haven't changed any readiness levels as a result of this up to this point.
Q Sir, I wonder if you can tell us about your visit yesterday with Fort Carson and -- given the reports of troubles in warrior transition unit there. What did you see? What were your impressions? Do you agree with those reports?
SEC. GATES: Yeah, I spent -- I spent two hours in meetings at Fort Carson. I met first with about 10 wounded warriors in the Warrior Transition Unit and some of their spouses, and then I spent an hour with a cadre of the doctors, the caseworkers, the social workers and so on.
And, as I told my staff meeting this morning, I didn't hear a single complaint about the warrior transition unit itself. And several of the soldiers spoke highly also of their rear detachments -- in other words, the support back at their bases.
We still have work to do in terms of the medical disability boards and the amount of time that takes. There were -- there were some vocational training programs that had worked very, very well that had had to be terminated for a lack of funding, and I want to see if we can't get those started again. It was a partnership between the WTU and a local community college in Colorado Springs in terms of vocational training for the soldiers.
But I think that what I heard was reassuring. I will -- I will tip my hand a little bit. One of the wounded-warrior soldiers gave me a long op-ed that he has written that he would like to have somebody publish that has sort of his view of the WTU, which is a different one than has been discussed before. So I came away from that meeting very encouraged.
The meeting with the cadre and so on, I think that some of the concerns that were expressed there were the number of soldiers who had a variety of problems that had been assigned to warrior transition units that were not the victims of combat injuries, and the motivation for some of those soldiers and so on.
But, again, the professionals had very high respect for the soldiers they were trying to -- trying to treat. They have a -- they have a pretty robust professional staff. In terms of counselors, they have their own psychiatrist that's associated with the program, they have counselors. And they have an occupational therapist, they have a social worker. And so they -- they've got a -- they've got a pretty robust staff. They still would like some more, but, frankly, we just hired about all there are available.
So I came away encouraged, but also, as I do from every one of these sessions, with something of a to-do list.
Q Secretary Gates, you've tried to keep politics out of defense, and I was wondering, what's your confidence level that President Obama will actually veto the defense policy bill in a -- in an election year? And what are you going to do to convince him that that's the case?
SEC. GATES: Well, I obviously did not issue the statement that I did in my testimony on the Hill without talking with the president first. So I try not to climb too far out on a limb without knowing nobody's back there with a saw.
Q But you think he's going to actually go ahead and veto the bill?
SEC. GATES: Well, we'll have to see at the time that the decision has to be made. But I did not -- he was fully aware that I was going to make that statement. And, frankly, I think that if he were not prepared to substantiate that, he probably would have waved me off at the time.
Q Mr. Secretary, as with the alternate engine, will you recommend a presidential veto if the final defense bill contains the half-percent pay raise that the HASC has added in that you all did not want?
SEC. GATES: No. As I said with respect to the carrier, I want change, but I'm not crazy. (Scattered laughter.)
ADM. MULLEN: I mean, this is -- this is a very important issue. And part of this is, I think I saw somebody accrue this out over the next 10 years, and you may have done this, but it's $5.2 billion that we didn't ask for. And while certainly we're all concerned with compensation, that's another 5.2 billion (dollars) that's going to have to come from somewhere, and typically those get authorized without any money being put behind them, and we've got to take them out of hide back here in the building. And that's one of the things we're trying to get away from.
Q So not the case that the raise is a foregone conclusion for the immediate future?
SEC. GATES: Well, we'll see what the Senate does.
Q Can I change the topic to Pakistan? We have a couple senior American officials who recently visited there. There's some reporting in the -- in the Pakistani press that among the topics that was discussed is North Waziristan and a timetable for the Pakistanis' moving in there. I wonder, Admiral Mullen, can you bring us up to date a bit on what your understanding is as to when and if the Pakistanis are willing to go into North Waziristan?
And, Mr. Secretary, can I ask you -- there's been a lot of rhetoric out of the administration since the Times Square incident that Pakistan must do more in response to that. I'm curious, what exactly do we want them to do more of? Since there's clearly -- obviously, they've made an offensive against TTP, which seems to be the organization behind this. What more are we seeking the Pakistanis to do in response to this?
ADM. MULLEN: Well, as far as this visit that General Jones and Director Panetta took, I think I really need to refer you to them. And the fact is, I haven't -- I actually haven't spoken with either of them since they -- since they returned.
With respect to North Waziristan and my engagement with General Kayani: Well over a year ago, you know, he'd indicated that, as has been reported, you know, that there are plans to -- plans to execute that mission. But very specifically, you know, the timeline's really up to him, and it goes back to what I understand and believe, that, you know, he's stretched. He's got two fronts. He's got a military that's lost a lot of soldiers, sacrificed a great deal. And so that -- it makes a lot of sense to me, you know, that he does get to pick this timeline. They're struggling in the build phase in Swat, behind the security that he's established there. So this is not a one-of kind of thing. It's really part of an overall campaign plan.
And the other thing I'd say is, what he's told me he would do -- when I have dealt with him in the past, what he has said he would do in the future he's always done.
SEC. GATES: I would just add to that that he has, I think, seven divisions and 140,000 troops in that area. So it is -- it is a huge effort that Pakistan is -- is making.
What we have seen here is yet another new phenomenon, and that is the Tehreek-e-Taliban Pakistan not only trying to overthrow the government of Islamabad, in Islamabad, but also launch attacks against -- outside of Pakistan and, in this case, against us. I think that when the Pakistani Taliban approached Islamabad a year and a half ago, or whenever it was, was a wake-up call for the Pakistanis that these -- that this group was a -- an existential danger for the government of Pakistan itself. We now have a mutual interest in trying to stop this group, stop it from carrying out attacks inside Pakistan, stop it from carrying out attacks outside of Pakistan, and especially in the United States.
And so I suspect that the main theme of these talks was -- that were held was, how can we intensify our cooperation in dealing with this mutual threat that we face? My impression has been that there has been close cooperation since the bomber was arrested. So I think it's more about that than any qualitative change.
STAFF: Perhaps time for one more, sir?
SEC. GATES: Yes.
Q Mr. Secretary, the U.N. resolution on Iran, is this the kind of thing that you've been calling for for months? Is it enough? And most importantly, do you think it's really going to change Iranian behavior?
SEC. GATES: Well, I think first of all, it's -- as best I can tell, if the resolution were to be passed in anything like its current form, it's actually somewhat stronger than I expected. But as I discussed with a lot of our allies, the importance of the resolution is twofold.
First, it serves as a reminder of Iran's international isolation, that all of the major powers are arrayed against Iran's nuclear- weapons ambitions. Second, and more concretely, it -- the resolution provides a new legal platform that allows individual countries and organizations such as the E.U. to take significantly more stringent actions on their own that go way beyond, well beyond what the U.N. resolution calls for in and of itself. So I think that the resolution has benefit on two levels.
And I would just make a final comment. If the resolution did not have an impact in Iran, it's not clear to me why the Iranians would have made -- are making and have been making such an extraordinary effort to prevent it from being passed. If it were irrelevant as far as they were concerned, I don't think you'd see them expending the kind of diplomatic and other kinds of energy to try and prevent its passage.
Q So do you expect it to change their behavior?
SEC. GATES: Well, we'll see. I think it's a combination of things. As I said, it's not just the U.N. resolution. It's the -- it's the actions of individual countries over and above that. It is -- it is a variety of pressures on Iran. You know, by itself, we've seen other resolutions before that have not, obviously, changed their behavior. But as we go along in this process, I think that the ratcheting up of what other countries are willing to do on their own, using the resolution as a basis, does have the potential to change behavior.
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